Many potential business sellers call us and ask what they need to begin the process of selling their business. So, what do you need if you are a seller?
- Good and up-to-date financial records
Good financials are extremely important to the process of selling a business. While these do not need to be audited, they still need to be accurate. This means, at the very least, having a CPA do your tax returns and prepare any interim (year-to-date) financials. If you put yourself in the position of a buyer, they are making a large financial commitment to buy your business and will spend thousands of dollars on due diligence. Many qualified buyers may walk away from the negotiating table if the financials are sloppy or not prepared by a professional. This usually includes at least the last three years of business tax returns, income statements, and balance sheets, plus any interim financial statements. These need to be within the last 90 ninety days to be relevant to most buyers and financing sources.
2. Information on the operations of the business
This includes the sales process, the human capital in the business, and how any processes occur to make products or services. This is where we need to know as much as possible. The more we know, the more we can suggest any fixes that might concern buyers. It also helps with our marketing efforts. The more we understand the business, the better we can negotiate with the buyers.
3. An informational meeting between us and you
Here we will discuss the process- how and to whom we will market the business to and time frames for each step. We will also discuss business valuation and how the buyers, bank, and third party valuation experts will impact the process.
